For some, that will take the form of an enthusiastic next generation – whether family or employees – to take up the reins and steer the business into the future.
For others, without an obvious successor, the investment of time, energy and money required to transition the business may make the idea of selling it a more desirable route.
The transition to low carbon energy is inevitable; the unknowns are its speed and route. This leaves many distributors at a crossroads, wondering what may be around the corner.
Faced with uncertainty, the idea of taking control of your own future certainly has its appeal and, for some, that will be a decision to sell.
An acquisition strategy
With this in mind, we caught up with Dave Walmsley, Managing Director of NWF Fuels, a company enthusiastic about expansion through acquisition.
Having spoken with Dave just over a year ago, 6 months into his time with the group’s fuel division, we were keen to get an update on how the strategy is working out, and what it may mean to those considering selling.
Dave agrees there is uncertainty around future legislation affecting the sector but also highlights other, more general, challenges: “It’s just the sheer cost of running an oil distribution business now. Salaries have increased and the cost of the trucks has just gone through the roof – twice what it was five years ago. It’s an expensive business to be in.
“The weather has been unpredictable, so domestic heating volumes are down. Our analysis tells us that it is not a decline in customer numbers but, typically, customers are using less.
“In that market, the only way to grow is to increase market share.”
This leads us back to our previous conversation with Dave, when acquisition, along with increased efficiency, were his primary business drivers. Has there been much progress?
“Yes, there has. Our last two acquisitions were Sweetfuels in Wiltshire and Geoff Boorman Fuels in Kent.
“Geoff Boorman Fuels is an interesting one, because it is a dry depot – they load and deliver from the terminal. The owners were looking to retire, so they left, and we have been delighted to retain the team. The drivers are there, Paul (Paul Taylor, Boorman’s General Manager) and the two people in the office are there. They worked from a portacabin in the farmyard of the former owner, so we established a new serviced office in Eden Bridge, and Paul is now running the business down there.
“They do an excellent job; we’re very happy with them. Of course, having worked for a family firm, you have to get used to ‘big company life’, which they have done superbly.”
A clear picture
“Following an acquisition, we like to manage the business initially on a ‘business as usual’ basis. We also believe strongly in maintaining customer trust, and they like to buy from their local distributor. But what they really want is a fair price, delivery on time, effective communication and ‘please don’t trample across my lawn, while you’re doing it’.
“If you make too many changes, too quickly, without getting a clear picture, it can also be very disruptive to the team. Now they are settled, we can start to see synergies. Paul has already identified drops where it would make sense for our other depots to be delivering and vice versa – music to my ears!
“That makes us more efficient. Drops per mile, average drops per day – you don’t see huge movements when you look at averages, but they are steadily going in the right direction.”
With the opportunities that synergies present, does that affect what you look for in an acquisition?
“We are certainly looking at postcodes that we are adjacent to but not in, driven by data on the oil-fired homes in these postcodes and with a focus on England and Wales.
“But we also balance acquiring a new postcode with it needing to be someone who wants to sell. The sales process is not easy for the seller – the need to keep it secret from the team for 6–9 months while it goes through the necessary conversations and process – that is why the person selling must want to be prepared to see it through. If somebody wants to sell and we think the price is fair, then I would prefer them to be in a postcode adjacent to where we are.
“There needs to be a strong, loyal customer base, a local presence, and an opportunity to enhance the profits too – to find efficiencies.
Another challenge is finding a business that is realistically priced. Three to four years of enhanced profits have made this hard.
“That said, there is always a start point, and NWF is a down-to-earth company, happy to have a good, honest conversation with any potential sellers.”
As evidenced by its acquisition strategy, NWF has a deep belief in the longevity of liquid fuel distribution with Dave explaining: “It is good niche distribution of a good niche product.
Acquisition is not a painless process and is time-consuming but can be extremely rewarding. Following the company sale, the team at Geoff Boorman Fuels shared how: “The good thing about NWF coming along, was that our future was made clear.”
Buoyed by acquisition successes, NWF is ready for it and looking forward to the next one!
CASE STUDY
A year on: the integration of Geoff Boorman Fuels with NWF Fuels
Geoff Boorman Fuels, a distributor based in Edenbridge, Kent has been supplying domestic heating oil to homes throughout Kent, Sussex and Surrey for over 20 years.
In line with its strategy, NWF Fuels announced, in July 2023, the acquisition of Geoff Boorman to “complement Home Counties Fuels, the Group’s Kent based commercial fuel distribution operation, thereby supporting the Group’s development in the South-East”.
A year on, we spoke with Paul Taylor, Depot Manager for Geoff Boorman Fuels to take an honest look at how the reality of integrating an acquired business compares with the expectation.
Background
“I was initially in the Royal Marines, going to the Falklands war in 1982 and serving for 9 years, before joining the haulage industry, and then running my own haulage company for 18 years, before I wrapped the business up in 2008/9 and moved to London taking up my first driving job in fuel distribution with Turners.
Several fuel distribution jobs followed, and Paul also had his first experiences of acquisition which were, as he shared, ‘not good ones’.
Joining Geoff Boorman Fuels three and a half years ago, Geoff (Boorman – owner) asked Paul to become his General Manager – some 15 months before the business was sold.
Paul had been down the acquisition road before, in previous companies, and had not had a positive experience of the process, feeling that the experience of the existing team was often undervalued by the incoming company, resulting in a rapid turnover of personnel following the acquisition.
The team at Geoff Boorman are clearly hugely important to Paul, and of the 7 drivers in his team, 6 had been through the process before. “After our previous experiences, when news broke of the sale we were all thinking ‘here we go again’.”
A different approach
But NWF struck a different note. “At the initial meeting, NWF Fuels shared that they would deem the acquisition a success if all the staff were still here after a year. And we are.
“All of the other drivers and my two members of staff are still here. That is a massive plus for us as a business, and for me, as I have enormous trust and respect for them all. It is important to me, and it is important to NWF Fuels, that we have retained all our staff.”
“Becoming part of a larger business has also brought some tangible benefits: Job security, improved pension and other financial considerations.
“These are a massive positive, and things we would not have had if we had remained a family business.
“A lot of the drivers are aged around 50/55 and hoped this job would be their last before retirement. Because of the age of the previous owners, there was a lot of uncertainty over the company future, so NWF Fuels coming in and buying the business was a huge positive in that respect.”
“We moved out of the farm and into purpose-built offices and the Directors came to meet me and the team. I had an acquisitions manager, James, who was excellent and spent a lot of time going through any changes that would happen.
“Mark Adcock (Sales Director) also came down and outlined his expectations including his ambition that the team would remain intact.
“That level of communication was important. It showed a level of commitment to us and to me and gave us a clear understanding of what the process would be. Changes have been implemented along the way but always with discussion, never foisted on us.”
“Geoff Boorman Fuels was already a successful company, and the NWF Fuels approach felt very much ‘if it isn’t broken don’t fix it’. No process is ever perfect or without frustrations, but it has always been done with understanding.”
What was your biggest concern after the initial conversations?
“How will it manifest? Will they be true to their word? And, in fairness to them, they have.
It has been a steady and good process. It is still a work in progress, but it is always a two-sided discussion.”
What have been the biggest challenges?
“For me, my background is transport, so taking over the general running of the business, the sales and other parts I hadn’t done previously have been a massive challenge to me, but NWF Fuels has been very patient and given me the training and support I have needed to take on those aspects.”
Customer impacts
“Our older generation don’t like change, and they were, of course, aware of it from the start, but NWF Fuels was keen that we retained the colour scheme, the drivers, the uniform etc. and that reassured our customers.
“There was a massive amount of trust and respect built up over years, so it was a case of trying to retain that with the same level of service and communication.
In Paul’s eyes, the biggest compliment was when customers fed back that “nothing has changed” and continued to order.
And there are benefits for the customers too, with Paul noting the assured supply that has come with being part of the larger NWF group – something he urges smaller businesses considering being acquired to ‘not take lightly’ in terms of a business advantage.
Looking back over the experience of the past year, Paul considers whether he would recommend being bought out to other independent distributors: “Depends who is buying them,” he says with a wry smile. “At the end of the day, the impact of an acquisition will depend on who is buying you. It can only be a positive if it is done properly, and in our experience with NWF Fuels, any negatives have been far outweighed by the benefits.”
“I have a good, strong team and our strength is our togetherness. They now have a sense of security and future and they are all here to stay.”
Image credit: NWF
